Nike is successfully staging a turnaround, and its recent ad featuring former NFL player Colin Kaepernick is a subtle sign of its strength, according to Canaccord Genuity.

"After two years of a soft product cycle that led to increased inventory levels, higher discounting, margin compression, and market share declines, Nike has regained its footing and is solidly marching back to top form," Camilo Lyon, an analyst at Canaccord Genuity, said in a note sent out to clients on Tuesday.

Nike's recent controversial ad campaign — which tapped several athletes including Kaepernick as the faces of a campaign marking the 30th anniversary of its "Just Do It" slogan — shows the company's renewed strength, the analyst noted.

Kaepernick, a former football quarterback, protested racial injustice by kneeling during the national anthem.

"This premeditated move was another subtle but significant sign of Nike’s strength and confidence in its position in the marketplace, one that likely does more good than harm," said Lyon. He pointed out that the ad campaign "took a stand in support of a social issue" where few companies have of late, "strengthened the ties" with Nike's sponsor athletes and "spoke to Nike’s core consumers in a very Nike-esque provocative way."

Canaccord Genuity raised its price target to $95 from $78, 15% above the stock's current price, and upgraded its rating from "hold" to "buy."

Nike's bet on Kaepernick has paid off, at least among millennial investors, according to data from Robinhood, a no-fee brokerage popular among younger traders. A total of 15,191 investors added Nike to their portfolios last week through Thursday, up 45% from the prior week, according to Business Insider's tracking of the data.